The biggest misconception is that your personal finances are separate to the finances of your business
The biggest misconception is that your personal finances are separate to the finances of your business.
When applying for finance for your business, part of the credit criteria is that the business owners have a clear credit check.
Regardless of how good your companies financial information is, if you miss or make late payments on your personal accounts, this could literally sink any chances of finance facilities being made available .
Why Finance facilities include your personal financial behavior as a risk factor:
- You are a custodian of the financial welfare of your business
- Late or non-payments on your personal profile could be a result of cashflow in the business impacting your monthly salary to honor your commitments.
It is equally important to choose partners in your business who are like minded – one director with a poor credit profile – can jeopardize a successful application.
Personal finances can be tricky at the best of times – make sure you don’t over commit yourself as your business grows. Keep it simple , keep it within your budget – you don’t have to keep up with the Jones’s – they are broke!